October 2008

October 30, 2008

With the global economic implosion now seen as being of such a magnitude that long-standing ways of transacting business have now been radically altered (forever, some say), we’re seeing more signs of a return to days when one was expected to actually have the money to pay for something before they bought it; how about that?On that note, allow me to take this opportunity to re-introduce to you the dinosaur known as layaway, and further say that its return is a most welcome sign.

For those of you who have no idea what layaway is, either because you’re too young or your memory is too foggy, it is, essentially, credit in reverse.Rather than “buy now and pay later” as you do with a credit card, you pay now and then buy (i.e., receive your purchase) later.Rather than use your credit card with its exorbitant interest rate to buy a TV set today that you’ll be watching in your living room tonight, you resist the temptation for instant gratification and make arrangements with the merchant to make regular payments toward the TV set until it is fully paid for; at that time, the merchant will retrieve from storage the TV set that he has agreed to keep set aside for you (or “laid away”) and give it to you to take home.

The renewed popularity of layaway is occurring for reasons that by now should be obvious.First, the availability of credit is not what it once was, and existing card limits have been tightened in many instances.Furthermore, many of those who already have a pile of debt are finding they’re less inclined to add to it during a recessionary economy in which job loss becomes much more likely.Lastly, and perhaps best of all, more people are simply recognizing the prudence of paying in full for something before actually taking possession of it.

While the availability of layaway has strongly receded over the years as the popularity and accessibility of credit cards has reached levels that can only be described as absurd, those businesses that have chosen to still offer layaway are now seeing a noticeable increase in demand for it.In fact, Kmart has just rolled out a new ad campaign that actually touts layaway as a great way to deal with the expense of Christmas.The resurgent interest in layaway has become so profound that there is now a website, www.elayaway.com, where consumers can shop for products through the site’s established (and growing) merchant network using layaway; your layaway payments are automatically deducted from your bank account, and you are shipped the product when it has been fully paid for.

It is great to see this.While there is no doubt that many are turning to layaway solely because they have no more room available on their credit cards, there is more and more evidence suggesting that many people are opting for it because they’ve chosen to embrace basic financial prudence in their daily lives.

I’ve said all along that there a few silver linings associated with what has occurred here in the economy of late, and one of the silver…really gold…linings is that more and more people are now resolving to live within their means.I don’t expect to see the majority of people who use credit cards for casual consumer purchases to all of a sudden turn them in and replace them with layaway accounts, but perhaps they should.While the desire for instant gratification is understandable, that is not the same thing as justifiable.There are countless examples in society where the pursuit of instant gratification is unhealthy, immoral, or otherwise undesirable, and few among us would disagree with that notion.Normally, we would not think of the innocent practice of “buying stuff” as something to be approached with great caution, but maybe we should.I, for one, welcome the return of layaway, but not so much on behalf of the practice itself but rather for what it represents: a healthy step back toward fiscal sanity by the American consumer.

Are you unsure about your present investment portfolio? Do you want to get started investing but have no idea where to begin? For as little as $99, I will personally evaluate your current holdings and make specific recommendations, as appropriate, on your behalf. No strings, no gimmicks, no tricks; just straightforward investment advice from an experienced veteran of the financial wars. If you're interested, please send me an email to either bob@stockmarketincome.com or stockmarketinc@aol.com. I look forward to hearing from you!

Disclaimer: The investment advisory services of Mr. Yetman and his firm, Stock Market Income Advisors, Inc., both together and separately, are available only to residents of those states in which Stock Market Income Advisors, Inc. is appropriately registered or in which it enjoys a lawful exemption from registration. Additionally, no person or entity may consider himself/itself a client of Stock Market Income Advisors, Inc. prior to the bilateral execution of both a Confidential Profile and Investment Advisory Agreement. Furthermore, it is important to note that neither James L. Paris nor Christian Money.com are registered investment entities or agents of Stock Market Income Advisors, Inc., and do not claim or accept any responsibility for any consequences arising from any relationship entered into by Stock Market Income Advisors, Inc. and any person or entity.

October 22, 2008

The upheaval in the stock market has prompted many to wonder aloud about the continued viability of so much we only recently took for granted.Notable among these considerations is the subject of retirement.You don't have to look very long nowadays to find countless numbers of news stories that are focused on the complications the market's gyrations have wrought on the retirement plans of so many.A lot of folks are delaying retirement for now, while others are planning to retire on time, but doing so in acceptance of a lower standard of living than that previously anticipated.

I don't ever see myself facing this issue, regardless of how much money I have set aside.I don't ever plan to retire.In fact, I firmly believe, and have always believed, that retirement is a bad idea.

I will confess to being a little unclear as to the history of the retirement concept.How and when did it become standard acceptance within society that we retire?I certainly can't seem to find a scriptural basis for retirement, nor can I really find a time-honored, historical precedent anywhere else.It seems like the concept gradually morphed into what it has become: an average Joe working hard nearly all of his life to live like a sort-of rich person during the last few years of it.

First of all, I think retirement is bad for our bodies and souls.I believe that as humans we are made to be productive.One of the best pieces of anecdotal evidence supporting that fact is how poorly our mental and physical faculties run when subject to non-use.We were simply not made to do nothing.Work is good for us, on so many levels.I' am reminded of my father, who was in chronically poor health for years until his death in 2007.Although he was fighting disease for a long time, he was still functional enough to go into work every day, which he did.The ability to go to work and remain busy, productive, and useful (the three don't always go together) allowed him to focus on something other than getting old and withering away.While he eventually lost his fight (the last I checked, no one escapes this world alive), the reality is that without work, there is no doubt in my mind that I would have seen him pass away much sooner.

Staying with the "bodies and souls" theme, another problem I have with the concept of retirement as we understand it to be is that it asks people to work like dogs during the best decades of their lives, and trade that for the ability to relax any day of the week during the years closest to death.I reject that idea.I would much rather work a standard, reasonable schedule all of my days, having the ability to enjoy the best parts of life while I am younger as well as older.

Additionally, retirement is bad for our wallets.The financial benefit associated with continuing to work is self-evident; the best way to ensure you don't run out of money is to continue earning it.This does not mean I'm saying you should eschew investing; not at all.Continuing to work and investing for long-term growth are hardly mutually exclusive activities.In fact, continuing to work has a beneficial effect on your portfolio, as doing so allows you to remain invested in more growth-oriented vehicles for a longer period.Now, some of you may be asking, "What's the point of investing at all if you're planning to work all of your life?" That's easy.In the first place, best intentions aside, you may indeed reach a point one day when your body, your mind, or both just cannot function at work any longer.Additionally, the sizable nest-egg you have set aside while you continue working can serve as your resource for amazing vacations and other expensive pleasures in which you choose to indulge as respites from your labors.When you are no longer earning an income, you cannot look to your savings as much as a source of fun, because its focus becomes helping you to cover your living expenses going forward.

Look at this: If you accumulate $500,000 in an investment portfolio by age 60, you might think, "Hey, that's great," but is it?If you continue to work until age 70 (now remember, I'm saying people should work all of their lives), that $500,000 now becomes $1.2 million (assumes a 9% annualized rate of return)...without making another contribution to your account(s).If average life expectancies are around 78, I would rather take my chances with $1.2 million lasting 8 years than with $500,000 lasting 18 years.Furthermore, as life expectancies increase, so will the demand on our financial resources.Continuing to work as long as possible will help guard against outliving your money.

I say just keep working, and put your money aside to enjoy a better quality of life along the way.You don't have to work a 40 or 50 hour week in your sixties and seventies to meet your goals; in the years preceding his death, dad worked about 25 hours per week, which was perfect; it allowed him to remain productive and earn a good income from his lifelong profession, but still afforded him the time to do other things.Additionally, because he was no longer a key person at the office, it was no big deal for him to take extra days off to enjoy long weekends and vacations.To me, that sounds like a plan.I want to be productive and I want to be secure.I don't want to have to worry that the foolish decisions made between key factions of government and business over which I have no control...like the promotion of 100% mortgages to anyone with a pulse...are going to all of a sudden change my plans unexpectedly.If I plan to work, which I do...I should be fine, come what may.

Are you unsure about your present investment portfolio? Do you want to get started investing but have no idea where to begin? For as lttle as $99, I will personally evaluate your current holdings and make specific recommendations, as appropriate, on your behalf. No strings, no gimmicks, no tricks; just straightforward investment advice from an experienced veteran of the financial wars. If you're interested, please send me an email to either bob@stockmarketincome.com or stockmarketinc@aol.com. I look forward to hearing from you!

Disclaimer: The investment advisory services of Mr. Yetman and his firm, Stock Market Income Advisors, Inc., both together and separately, are available only to residents of those states in which Stock Market Income Advisors, Inc. is appropriately registered or in which it enjoys a lawful exemption from registration. Additionally, no person or entity may consider himself/itself a client of Stock Market Income Advisors, Inc. prior to the bilateral execution of both a Confidential Profile and Investment Advisory Agreement. Furthermore, it is important to note that neither James L. Paris nor Christian Money.com are registered investment entities or agents of Stock Market Income Advisors, Inc., and do not claim or accept any responsibility for any consequences arising from any relationship entered into by Stock Market Income Advisors, Inc. and any person or entity.

October 14, 2008

It is time to buy.I’ve been saying that for a while now, but if it has been a good time to buy for the past several months, it is currently an amazing time to buy in light of the market’s huge drop in valuation recently.Let’s dive right in and look at just a few of the many excellent stocks now available for growth investors who are smartly on the hunt for stunning value.

ExxonMobil (NYSE: XOM) – ExxonMobil is one of the so-called “supermajor” integrated oil companies, which is a fancy way of saying it’s one of the few 800-lb. gorillas in an industry that is key to just about everything humans in the 21st century need and do.It exhibits a lower-than average level of volatility compared to other stocks like it, and the hits the share price has taken in the midst of this latest example of panic selling have made it way oversold…and therefore a great buy; you should start to see sideline-sitters begin to recognize that fact very soon and start to move in, so don’t be late to the party yourself.Additionally, it’s worth mentioning that the level of debt carried by ExxonMobil is very low, which is what you want to see right now.The stock’s share price at this writing is about 30% below its 52-week high, which suggests great value.

Microsoft (NYSE: MSFT) – Here’s another stock that has been caught up as collateral damage in the panic selling we’ve seen in the markets of late.Microsoft is currently down about 40% from its 52-week high, and is also much too oversold at present.Microsoft is unique in that it is a huge company that operates without using any debt in its core operations, which means that the debt-related problems which plague the global marketplace at present will not be as impactful to Microsoft.Additionally, Microsoft has been seeing earnings increases of late.All in all, this is another tremendous company to consider as an addition to your portfolio…and if you own it currently, consider adding more money at this much-lower price.

Nike (NYSE: NKE) – Here we go again.Nike is my third offering of companies that is presently so oversold in the current market that it makes virtually no sense, given its fundamentals.What’s not to like about Nike?The stock historically exhibits low volatility, carries a low debt-to-equity ratio, and maintains a lot of liquidity.Right now, the stock is over 20% off of its 52-week high, and its presence in the global marketplace is a big reason why revenue has increased almost 17% in the past year.

These are but a few examples of the excellent buys that exist in the equity marketplace right now, and I don’t know that they’ll be at these great valuations for very long.Manic sell-offs often give way to rapid buy-ins, in the way that rubber balls bounce higher when dropped from greater heights.Still, here are a few things to remember as you begin to consider your entry/re-entry with new money into the stock market:

Do not go in all at once.When you go into a market like this with sideline cash, do so incrementally.Do not try to “time” a bottom, which essentially means trying to guess the absolute numerical bottom of a market cycle.While the benefit of hindsight will always be able to show us just where the absolute bottom was to a market cycle, hindsight is not available in foresight.Instead, you should move your available cash into the market during an apparent multi-year low over the course of the near term.What does that mean?Depending on how quickly events are occurring, that would generally mean between 30 and 180 days.

Do not go in expecting immediate returns.While you might turn out to be one of those who grabs some new investments at their actual, respective bottoms, don’t count on it.Investing during volatile markets means that you are making a deal of sorts; in exchange for getting your stocks at a great price, you agree to ride out the near-term volatile behavior of the markets while it looks for traction to begin its next sustained upward movement.It’s very likely…and you should expect…that your new purchases will see some modest downward movement during this time.Don’t be too concerned about that.Your focus should remain on the benefit of getting into the market at a general low, for the benefit of seeing substantial gains many years down the road.

The idea behind successful investing is simple enough:Buy low.While no one will argue that the volatility to which we’ve borne witness here recently has tested the resolve of even the most sophisticated and experienced investors, the steps that make up winning at the stock market haven’t changed: 1. You want to buy low. 2. Many excellent stocks are low right now. 3. Buy.

Are you unsure about your present investment portfolio? Do you want to get started investing but have no idea where to begin? For as little as $99, I will personally evaluate your current holdings and make specific recommendations, as appropriate, on your behalf. No strings, no gimmicks, no tricks; just straightforward investment advice from an experienced veteran of the financial wars. If you're interested, please send me an email to either bob@stockmarketincome.com or stockmarketinc@aol.com. I look forward to hearing from you!

Disclaimer: The investment advisory services of Mr. Yetman and his firm, Stock Market Income Advisors, Inc., both together and separately, are available only to residents of those states in which Stock Market Income Advisors, Inc. is appropriately registered or in which it enjoys a lawful exemption from registration. Additionally, no person or entity may consider himself/itself a client of Stock Market Income Advisors, Inc. prior to the bilateral execution of both a Confidential Profile and Investment Advisory Agreement. Furthermore, it is important to note that neither James L. Paris nor Christian Money.com are registered investment entities or agents of Stock Market Income Advisors, Inc., and do not claim or accept any responsibility for any consequences arising from any relationship entered into by Stock Market Income Advisors, Inc. and any person or entity.

October 03, 2008

The turmoil in the financial markets has been a test for even the most stoic of investors.Still, with that said, there are no challenges to either our money or our minds that cannot be met and defeated, but surviving…both mentally and financially…will depend upon your willingness to adhere to sound principles of good investment behavior.

This is where the matter of investment perspective, or psychology, comes into play.While the perils facing stock market investors seem greater today than they’ve ever been, the reality is that even now…in these choppiest of financial waters…the impact of what is going on remains lessened as one’s willingness to adhere to sound investment principles becomes more substantial.The basis of “good” investment behavior is to remain unemotional; don’t trade unnecessarily.Don’t allow emotions to prompt you to sell or buy.It’s your head that should be making these decisions.Let’s look at some sound features of smart investing that have rarely, if ever, steered anyone wrong through the years.

Remember your timeframe.The investor who has somewhere between “several” and “many, many” years to remain invested in equities does not need to be terribly concerned with what’s going on right now, as bad as it is.This does not mean, necessarily, do nothing (I would reduce weightings in the financial services sector right now, and increase weightings in areas like health care and other “recession-proof” industries, for example), but the bottom line is that if you’re pretty evenly distributed among a broad-based portfolio of mutual funds right now, there may not be much you should do as someone who’s not looking to access your invested monies in the short term.

Lows are not times to sell but times to buy.I’ve always looked at lows as being the market’s way of putting investments on sale.If I buy a pair of jeans last week for $50, and the price of those jeans drops to $25 this week, what do I do?I buy another pair of jeans at $25, and appreciate that I was able to buy two pairs of $50 jeans for $37.50 instead (average cost of $50 and $25).This is no different from what you should be doing with your investments.If I have spare cash available, I will always buy when markets are down.What can I say?I love sales.Oh, and the best part of buying good investments is that unlike your jeans, your investments will appreciate in value over time, shorter-term downswings notwithstanding.

Focus on remaining rational during periods of market upheaval.This is extremely important.Too many investors seem to act as though the sky is going to fall when these kinds of market winds begin blowing.Do you really believe the markets are going to lose so much value, and be allowed to stay devalued by America’s political and corporate leadership, that they will be of no use to you as an investor for many years?While I suppose it’s possible that such a circumstance might come to pass, it is highly unlikely.One strategy you might find helpful in your quest to remain grounded is to look at market activity in the weeks, months, and years following historical periods of significant volatility.For example, the benchmark S&P 500 index rose nearly 20% in the six months that followed the events of September 11, 2001.You will find a lot of examples of that sort of thing happening.Why?Because significant drops provide buying opportunities for investors who’ve been sitting on the sidelines, and their infusion of money into the markets oftentimes acts as a catalyst for another bull market.The bottom line remains that irrational thought is precisely what will lead you to make rash decisions you’ll later regret.

If you feel that you must sell, don’t simply sell everything at once; instead, take the time first to re-evaluate your portfolio before making any “sell” decisions.When it comes to the investments you own, you have them because you thought, at one time, they were good to have.Assuming you are not an active trader anyway, if you want to give in to your inclinations to sell, do so methodically.Sit down and examine each of your investments to determine if you feel they’re still any good.For example, Dow stalwart 3MCompany (NYSE: MMM) is a stock that rates a “buy” from many quality ratings services.Would an investor sell 3M merely because it finds itself caught up in the same volatility that plagues the rest of the stock market?If I owned it (which I don’t), I would keep it, even through all of this trouble.The point is, if an objective analysis of your investments reveals securities you should be selling, it’s likely they’re securities that should be dumped anyway.

The funny thing about discussions of good investment behavior is that nearly everyone exits the interactions agreeing with the principles.Indeed, few of you are reading this and thinking, “Wow, these are really dumb ideas.”Fair enough.However, the challenge with constructive investment psychology is not that its principles are difficult to understand; it’s that they can be difficult to implement.In order for the concepts noted above to actually work, you have to apply them.To that end, there’s no magic bullet, just as there’s no magic bullet that will keep you from racking up exorbitant amounts of credit card debt when you know it’s a bad idea.You have to simply “steel” yourself to the task of doing the right thing.However, if you find that you’re capable of doing it, you will have gone a long way to overcoming one of the greatest pitfalls faced by the investor community – trading with your heart.